Pay, benefits goad Wal-Mart workers

By The Economist The New York Times SyndicatePublished November 25, 2012 - 5:15am Last Updated November 25, 2012 - 10:28am

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Demonstrators protest at Wal-Mart in Boynton Beach, Fla. on Friday. Wal-Mart employees and union supporters took part in a nationwide demonstration for better pay and benefits. (J PAT CARTER / AP)

They lined up near the television cameras, waving signs that read “On Strike.” Many wore the bright T-shirts of OUR Wal-Mart, which stands for Organization United for Respect at Wal-Mart, the group organizing the protest.

The hundred or so demonstrators marched through the parking lot of a Wal-Mart outside Washington, dodging cars and shopping carts until they stood face-to-face with a store manager.

Christine Bennett, a customer-service worker at that same Wal-Mart, quietly read a letter explaining that she and those behind her were protesting against “Wal-Mart’s attempts to silence and retaliate against associates who have spoken out about things like Wal-Mart’s low take-home pay, unpredictable work schedules and unaffordable health benefits.”

The manager responded courteously, and the marchers then politely retreated. No tires were burned nor shoppers inconvenienced.

This was one of what organizers claim to have been 1,000 protests at Wal-Marts in the days before “Black Friday” — Nov. 23, the day after Thanksgiving, the biggest shopping day on the American calendar. Wal-Mart seems uncharacteristically spooked.

The company filed a complaint with the National Labour Relations Board, the federal agency that enforces America’s labour laws, alleging that the United Food and Commercial Workers International Union, which helped organize OUR Wal-Mart, is engaged in unlawful picketing, trespassing and “intimidating Wal-Mart customers and employees.” The UFCW retorted that Wal-Mart is “grasping at straws.”

Unions such as the UFCW, which represents many workers in the kind of stores that Wal-Mart drives out of business, have had little success in organizing Wal-Mart’s 1.4 million employees.

They charge that the company underpays its workers, offers them inadequate health insurance, denies them the right to organize and keeps too many of them on unpredictable part-time schedules. Yet Wal-Mart is thriving, because shoppers love its low prices.

Some say that the current protests have less to do with convincing Wal-Mart’s workers to join unions than with stirring up antipathy toward the company.

Paul Osterman, a Massachusetts Institute of Technology professor who studies part-time and low-wage work, notes that Wal-Mart comes out of the rural south, infertile ground for unionizing, but is trying to move into more heavily unionized cities, particularly in the northeast. To do so the firm will need political support.

Events such as this week’s protests, Osterman says, “are aimed at organizing a constituency that will ask hard questions of Wal-Mart.”

Others are asking hard questions of American unions. They won great victories in the past, winning higher wages and better safety standards in mines and factories.

Still, as the economy has shifted from heavy industry, which is relatively easy to unionize because a firm that has invested a billion dollars in a factory will be reluctant to close it, to services, which are more mobile, union membership has fallen, from 24 per cent of private-sector workers in 1973 to a mere 7 per cent in 2011.

Within industries, the firms with the most demanding unions have lost out to those with more moderate ones or none at all.

In the public sector, by contrast, union membership has risen from 23 per cent in 1973 to 37 per cent in 2011.

Governments have no competition, so they cannot easily go bust.

The politicians who negotiate wage deals with public-sector unions are often funded by the same unions. This is one reason why America’s municipal finances are a mess.

Wal-Mart discourages its workers from unionizing partly because it sees what has happened to firms such as Hostess Brands, an 85-year-old company that entered liquidation on Nov. 21.

Hostess makes some of America’s most beloved snacks, among them Wonder Bread, Ding Dongs and the ubiquitous Twinkies.

Last January Hostess filed for bankruptcy, saying that it owed $1 billion to various creditors, including the pension fund for the union that represents 5,600 of its bakers.